• The Journal of Asian Finance, Economics and Business
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• v.9 no.2
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• pp.325-333
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• 2022

Foreign direct investment (FDI) and export are now often regarded as two of the most important drivers of economic growth on a worldwide scale. The impact of foreign direct investment on Vietnam's exports is investigated in this study. The data for the time period 1985-2020 was obtained from the World Bank and the Vietnam General Statistics Office. The years 1985 to 2020 were chosen to evaluate the evolution of macroeconomic parameters since 1986. The impact of the Covid-19 epidemic on renovation reform. The Johansen co-integration test proved that FDI and domestic investment (DI) had a long-term positive impact on Vietnam's export growth. The Granger causality test revealed that there is a one-way relationship between FDI and export in the near term, but no such relationship exists between DI and export. The result of the variance decomposition study demonstrates that the FDI sector has a bigger impact on Vietnam's export growth than the DI sector. Furthermore, export activities are vulnerable to FDI sector shocks. As a result, in recent years, FDI has been regarded as the most important factor of export growth in Vietnam.

• International Area Studies Review
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• v.13 no.3
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• pp.145-161
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• 2009

Applying the shift-share analysis, this paper decomposes FDI inflow into Korea for the period of 2003-2006. The paper finds that Korea has been lagging behind the world average in absorbing inward FDI, thereby recording negative aggregate industry-mix effects and negative aggregate competitive effects as well. However, the following industries have recorded positive competitive effect: electrical and electronic equipment, motor vehicles and other transport equipment, hotels and restaurants, transport, storage and communications, finance, and business services. In a nutshell, Korea is revealed to have competitive advantage in absorbing inward FDI in a few manufacturing industries and most of service industries. Government policies should accordingly be focused on these industries to encourage more inward FDIs.

• Journal of Korea Trade
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• v.24 no.8
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• pp.63-80
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• 2020

Purpose - Recent empirical studies have shown that FDI is expected to be strongly associated with democratic governance, political stability, and sound macroeconomic conditions of the host country. We attempt to take it a step further to see if governments implement a major change in institutional characteristics, will the institutional reform toward better governance have a substantive effect in enhancing FDI inflows. This paper thus aims to analyze the importance of good governance as an important factor in the attractiveness of FDI inflows in ASEAN+3 (Korea, China, Japan) countries. Design/methodology - To determine the effects of good governance on FDI inflows across ASEAN+3 countries recorded between 1996-2018, the Worldwide Governance Indicators (WGI) are used to investigate the impact of good governance on FDI inflows. The model has been estimated by using fixed effects to show the robustness of the results. Findings - Our main findings can be summarized as follows: Political Stability, Rule of Law, and Voice and Accountability have a statistically significant impact on the inflow of FDI in the ASEAN+3 Countries, especially for Korean economy. Moreover, GDP growth continue to exert their positive influence. However, Regulatory Quality, Government Effectiveness and Control of Corruption, though equally important, are insignificant to attract FDI inflows. The key finding is that good governance has a significant impact on inward FDI in the ASEAN+3 countries. Originality/value - Existing studies focus on the impact of political factors on FDI across countries. This paper instead attempts to investigate which type of good governance is the most important in promoting FDI inflows across ASEAN+3 countries, which is essential for multinationals to consider when choosing a foreign site as a possible FDI destination.

• Korea Trade Review
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• v.41 no.4
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• pp.1-19
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• 2016

This paper analyzed what determines affected FDI inflow of developing countries by using panel data from 65 lower-middle income and low income countries(Asia, Africa and Latin America). Empirical results showed that economic growth has a more positive impact on a middle income country than a lower one, and has a better impact on the Asian continent than others. Trade has similar effect on lower and middle income countries, respectively. ODA, however, has a negative effect on both sides, regardless of the continent. Industrial value added rate and labor force have a positive effect on FDI in low and middle income countries. Infrastructure was found to be a significant impact on FDI inflows in lower-middle income countries than in low income countries. There is no geographically significant difference except Africa.

• International Commerce and Information Review
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• v.17 no.3
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• pp.379-402
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• 2015

The purpose of this study is to determine whether there is a significant difference in impacts decomposed into scale effects and technique effects on $CO_2$ emissions between Greenfield FDI and M&A FDI flows into Korean manufacturing sectors, ultimately leading to clarify the relationship between FDI and environmental pollution. To this end, the research constructed a simultaneous model to analyze coincidental relationship of influence and interactions between each variable. Archival data, spanning the 15 years period from 1995 to 2009, is industry-level panel data on 13 Korean manufacturing sectors, and it is empirically analyzed with three-stage least squares (3SLS) method. Key findings can be summarized into two parts. First of all, Greenfield FDI has a greater impact on increasing industrial gross output, resulting in more $CO_2$ emissions than M&A FDI through scale effects. Secondly, technique effects of FDI have a bigger impact on $CO_2$ emissions than scale effects, implying that this inflow of FDI into Korea contributes positively to the reduction of $CO_2$ emissions. These findings are expected to play a meaningful role in establishing FDI policies with consideration of the environment by giving the implication that different incentives for each FDI type should be considered to maximize the effect of environmental protection.

• Journal of the Korea Society for Simulation
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• v.21 no.1
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• pp.19-26
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• 2012

In this paper, we study the relationship between FDI(Foreign Direct Investment) and economic growth in Kazakhstan. For this research, we, first, investigate the factors that affect FDI infow to Kazakhstan since its independence and determine the degree of their influence. Second, we study the impact of FDI per capita on GDP per capita. To achieve these goals, an empirical study is conducted with 18 years data from 1992 to 2009 from World Bank Database. Data are analyzed using multiple linear regression, time series analysis and Granger causality test. The results show that the determinant of FDI is GDP and economic freedom index in Kazakhstan. Economic growth is affected by FDI, too. Specially, FDI is positively related to GDP and economic freedom index. FDI per capita's impact on GDP per capita is 30.4 dollars increase in GDP per capita by one dollar increase in FDI per capital inflow. The results provides useful information for policy makers to improve obtaining large amount of investments and facilitate economic growth.

• International Area Studies Review
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• v.18 no.3
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• pp.23-46
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• 2014

Applying the dynamic shift-share analysis, this paper decomposes inflow of foreign direct investment (FDI) of Korea for the period of 2003-2012 into three components: world growth effect, industry-mix effect and competitive effect. Taking the group of developed countries as population for comparison, this paper finds that Korea has been lagging behind the group of developed countries in attracting FDIs, thereby having recorded negative aggregate industry-mix effects and negative aggregate competitive effects as well. However, the following industries have recorded positive competitive effects: textiles, chemicals, electrical and electronic equipment, motor vehicles and other transport equipment, hotels and restaurants and business services. Moreover, in the sub-period of 2008-2012, positive competitive effects have been recorded for most manufacturing industries. This reflects the fact that inward FDI into Korea has not been affected much by the financial crisis of 2009.

• Korea Trade Review
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• v.41 no.3
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• pp.177-198
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• 2016

China has retained economic growth rate of average 9% for more than ten years recently after China introduced capitalistic market economy system in 1979 by Deng Xiaoping. China has attracted foreign direct investment for a long time because it has retained very high economic growth rate, low labor cost, and various policies for foreign investors. This paper tries to analyse the determinants of foreign direct investment inflow after reform-opening of China with empirical analysis methods utilizing each province·city's specific characteristics by using the panel data from 1985 to 2013. For the empirical analysis we use random effect model, fixed effect model, pooled OLS, and random coefficient model. The results by pooled OLS and random coefficient model are presented for the comparison with the main results in the process of research. The research shows the results by fixed effect model are better than those by random effect model after doing Hausman's test. The results shows that GRDP, capital stock, and telecommunication exert a positive relationship with foreign direct investment, while express way variable exerts a negative one. China's education level surprisingly does not attract foreign direct investment even though it is not at a critical level. Therefore, the Chinese government should try to increase national income level as it symbolizes market size; encourage domestic investment; and construct high quality telecommunication infrastructure.

• Asia-Pacific Journal of Business
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• v.7 no.2
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• pp.21-37
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• 2016

Using panel data for 29 developed countries, this paper studies the relationship between financial flow and trade markets on Dutch diseases for the period 2000-2010 and applying a fixed effects model. In particular, the study shows that an increase in inflows of foreign direct investment (FDI) leads to an appreciation of the real exchange rate. The result also suggests that an inflow of FDI accompanied by exports or government expenditure from tax revenue leads to real exchange rate appreciation. This paper also argued that stock market with FDI does not cause an appreciation of the real exchange rate.

• Korea Trade Review
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• v.47 no.4
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• pp.89-102
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• 2022

This study is designed to investigate the effect of inflow FDI on the host country's economic growth and the role of absorptive capacity in this relationship. Eight developing countries in East Asia, including Mongolia, Indonesia, Malaysia, Myanmar, the Philippines, Thailand, Vietnam, and Cambodia, are analyzed. Year data from 2000 to 2018 are used. Based on the study of Hansen (1999), the panel threshold effect model is used, and human capital, R&D, and infrastructure are set as absorptive capacity by referring to Wang and Hwang (2013). The analysis results are as follows. It is confirmed that FDI has a positive effect on the economic growth of the host country, and absorption capacity strengthens the relationship between FDI and economic growth in a positive direction. At this time, it appears that a threshold exists for the moderating effect of the absorptive capacity. It presents useful implications for economic growth in developing countries.